Voluntary Surrender NRAM

down.butnotout

Hello Everyone,

This is my firsy post, I've looked through other threads to try and find some advice but couldn't quite match my situation. Firstly, after 17 years of continued employment, I am currently not working. My wife hasn't worked for years and is a housewife, raising our 2 children. In August through illness I had to leave my job. We lived a quite comfortable life up till then, now everything is falling down around us. As we have now exhausted our savings, I have had to return both our cars as well as other luxuries. We are living in a family home rent free, but our own property (which we out grew) has fallen into arrears with NRAM. There is a second charge with Picture also. There is no way out other than to hand the keys back after 6 years of ownership. I've asked to voluntary surrender the property, which NRAM have sent paperwork out which I don't agree to signing. How do I go about surrendering without signing these forms? Also, how do I go about telling Picture I'm surrendering the property. The end outcome of all this will be BR without doubt; I'm am just trying to get everything in order.
Sorry for the length of this post, I'm struggling with where to turn next, trying to keep strong for the family, at least the children are too young to know what Christmas is all about. BTW trying to apply for council tax benefit is an artform in itself!!

Eellogofusciouhipoppokunu

down.butnotout wrote: »

Hello Everyone,

This is my firsy post, I've looked through other threads to try and find some advice but couldn't quite match my situation. Firstly, after 17 years of continued employment, I am currently not working. My wife hasn't worked for years and is a housewife, raising our 2 children. In August through illness I had to leave my job. We lived a quite comfortable life up till then, now everything is falling down around us. As we have now exhausted our savings, I have had to return both our cars as well as other luxuries. We are living in a family home rent free, but our own property (which we out grew) has fallen into arrears with NRAM. There is a second charge with Picture also. There is no way out other than to hand the keys back after 6 years of ownership. I've asked to voluntary surrender the property, which NRAM have sent paperwork out which I don't agree to signing. How do I go about surrendering without signing these forms? Also, how do I go about telling Picture I'm surrendering the property. The end outcome of all this will be BR without doubt; I'm am just trying to get everything in order.
Sorry for the length of this post, I'm struggling with where to turn next, trying to keep strong for the family, at least the children are too young to know what Christmas is all about. BTW trying to apply for council tax benefit is an artform in itself!!

Handing back the keys to the lender is called 'jingle mail' in the US and allows them to walk away from a house that is in negative equity (i.e. it is worth less than the outstanding debt). The financial ramifications are that although their credit record might be trashed for a while, they don't have the worry about the negative equity any longer.

This is only valid in certain states in the US and is NOT valid in the UK. Here, the bank will sell the house at auction for whatever they can get for it. If the auction price does not cover the mortgage then you will be liable for the remainder.

i.e. If your mortgage debt is £120k (including any secured debt) and the house is sold at auction for £60k then you will be liable for the remaining £60k debt. This debt will be active for 12 years (unlike other debt which is active for 6 years).

Are you renting out this property while you live elsewhere?

down.butnotout

Thank you for your repley Eellogofusciouhipoppokunu. The property was rented, but has now been empty for 3 weeks. With other debts I have, I have no way in paying these. I have spoken to CCCS who have said BR is probably the only way out. My wife is looking for employment but this still won't cover any repayments. I am aware that I will owe on any difference on the mortgage, I now owe on outstanding leases on 2 cars. I am of the understanding this will be all included in the BR? :-(

Eellogofusciouhipoppokunu

down.butnotout wrote: »

Thank you for your repley Eellogofusciouhipoppokunu. The property was rented, but has now been empty for 3 weeks. With other debts I have, I have no way in paying these. I have spoken to CCCS who have said BR is probably the only way out. My wife is looking for employment but this still won't cover any repayments. I am aware that I will owe on any difference on the mortgage, I now owe on outstanding leases on 2 cars. I am of the understanding this will be all included in the BR? :-(

Just some questions to try and help you (not trying to pry but I'll need some info if I and others are to help)

Is the property in negative equity? Does the rental income (when you have it) cover the mortgage?

What other debts do you have? Are they secured or unsecured?

How long have you been off work?

What benefits are you receiving? Have you checked if you are getting everything you should?

antrobus

down.butnotout wrote: »

... I have spoken to CCCS who have said BR is probably the only way out. ..

If that's the advice you've been given, then that's the advice I'd follow.

down.butnotout wrote: »

.... I've asked to voluntary surrender the property, which NRAM have sent paperwork out which I don't agree to signing.

I believe that the general advice is indeed not to sign any such paperwork.

down.butnotout wrote: »

....
How do I go about surrendering without signing these forms?

Not paying NRAM will certainly result in them seeking repo, i.e. you don't have to do anything.

down.butnotout

Thank you so much for your replies.

Eellogofusciouhipoppokunu - The property is in neg equity. It was a Northern Rock Together mortgage so it has a secured and unsecured part to it. Also, there is a second charge on the property. I purposly served notice on the tennant as I wanted the property empty, it would not be fair on her. The rental only covered half of the repayment cost. I have been off work for 3 months now. In total, without the mortgage difference there is about £50,000 in unsecured loans, this was all manageable at the time as part of this was made up of 2 new cars. I am on ESA benefit and am applying for Child Tax Credits and Council Tax benefit.

antrobus - I read somewhere that to voluntary surrender was a better, quicker option as repo was involved more legal and was a lengthier process? I just want it off my hands now.

Many thanks

Eellogofusciouhipoppokunu

down.butnotout wrote: »

Thank you so much for your replies.

Eellogofusciouhipoppokunu - The property is in neg equity. It was a Northern Rock Together mortgage so it has a secured and unsecured part to it. Also, there is a second charge on the property. I purposly served notice on the tennant as I wanted the property empty, it would not be fair on her. The rental only covered half of the repayment cost. I have been off work for 3 months now. In total, without the mortgage difference there is about £50,000 in unsecured loans, this was all manageable at the time as part of this was made up of 2 new cars. I am on ESA benefit and am applying for Child Tax Credits and Council Tax benefit.

antrobus - I read somewhere that to voluntary surrender was a better, quicker option as repo was involved more legal and was a lengthier process? I just want it off my hands now.

Many thanks

If you moved back into your house you would be eligible for SMI. As you are on ESA the SMI would not be cut off after 2 years.

As your house is in negative equity, it's almost certain that if you went bankrupt that you would be able to keep the house. You would go through this with your OR. With the other debt lifted off your shoulders and with SMI and other benefits you would be able to meet your mortgage payments.

down.butnotout

Eellogofusciouhipoppokunu - I owe £785 on a credit card, £3010 overdraft, £6000 lease car payments as I've had to send them back early, £27000 NRAM unsecured £96000 NRAM (Mortgage) £17000 Picture (Secured). My income was around £4500 - 5000 a month which is now around £700 a month (benefits)

PippaGirl_2

You're right not to sign their forms. Instead you can send them your own letter saying you have no objection to it.

down.butnotout

Eellogofusciouhipoppokunu wrote: »

If you moved back into your house you would be eligible for SMI. As you are on ESA the SMI would not be cut off after 2 years.

As your house is in negative equity, it's almost certain that if you went bankrupt that you would be able to keep the house. You would go through this with your OR. With the other debt lifted off your shoulders and with SMI and other benefits you would be able to meet your mortgage payments.

The property is worth around £100000 - it is a small one bedroom flat and we are a family of 4, it just wouldn't work, far too small.

Eellogofusciouhipoppokunu

down.butnotout wrote: »

The property is worth around £100000 - it is a small one bedroom flat and we are a family of 4, it just wouldn't work, far too small.

How long have you been living rent free in your family home?